BENGALURU - Indian shares and bond yields fell on Monday as the country's budget failed to cheer investors, who expected stimulus measures to revive growth in Asia's third-biggest economy.
The broader NSE Nifty 50 index fell 0.12% to 11,651.95 by 0347 GMT, while the benchmark S&P BSE Sensex declined 0.26% to 39,645.91.
Finance Minister Nirmala Sitharaman's union budget on Saturday raised spending on farms and expressways and offered cuts in personal taxes, but the measures failed to address concerns of lower consumer spending and investment.
Shares fell during a special trading session on that day to their lowest closing level in more than three months.
"The biggest disappointment in the budget is that it has no measures that can revive economy in the short term," said Sunil Damania, chief investment officer at MarketsMojo.com in Mumbai.
There weren't enough measures that could take GDP growth to next year's projection of 6%, he added.
The benchmark 10-year bond yield fell by as much as 11 basis points to 6.49% as the government did not announce any additional borrowing for the current fiscal year. The rupee weakened 0.2% to 71.56 per dollar, tracking a choppy equity market.
"Now that the budget event has passed, focus of markets will shift back on macro fundamentals and valuations again," said Rajesh Cheruvu, chief investment officer at Validus Wealth.
"Valuations are not cheap and earnings continue to be fragile."
State-owned banks and consumer sectors led declines in the equities market. The Nifty PSU index was down 1.5% while the Nifty FMCG index fell 0.7%
Cigarettes-to-software conglomerate ITC Ltd was among the top losers, falling 2.1% as the budget proposed raising taxes on cigarettes.
Automaker Hero MotoCorp fell 2.3% after it reported a drop in motorcycle and scooter sales in January.
Indian Oil Corp and Asian Paints were the top gainers on the Nifty, rising 2.5% and 2.2%, respectively as oil prices slumped due to worries about lower demand in virus-hit China.
Broader Asian shares also stumbled on fears of the fast-spreading coronavirus.